Wednesday, February 10, 2016

The Fed’s assessment of the balance of risks is meaningful because officials won’t be inclined to raise short-term interest rates again if it sees growing risks to the outlook. Ms. Yellen’s testimony therefore underscores the market’s belief that a rate increase in March is highly unlikely ... In her testimony, Ms. Yellen made clear she saw an abundance of risks that could undermine growth and hiring and hold inflation down longer than hoped or expected.

A rate hike in March seems very unlikely at this point, but Yellen still expects gradual increases in the Fed Funds rate going forward.